Hello Bigger Pockets Community! I’m new here and new to Real Estate in general, however I am very enthusiastic and determined to learn and invest wisely. Here’s a bit about myself and my goals: Me: • - Early 30’s, single, no kids • - Compensation = ~$200k/yr (most of this is still W2) • - I’ve set aside between $75 - $100k in cash to invest in RE • - Current rent = $2100/mo. • - Credit score is high 700’s • - I do not own any property • - Split time between Phoenix, San Diego, and Denver Goals: • - I’m a business owner, and still have a full-time job for a bit longer, so those will take my time priority for the foreseeable future • - My time is critical to my business, so I’m hoping to avoid the more time-consuming options • - I’m looking for the best way to achieve high ROI and monthly passive income • - I have friends who are more versed in RE than I am, who I can partner with if needed I am still in the education phase; however, I am trying to decide what’s the best strategy for me. I am not afraid of putting in the work, but my business will take priority for now. My initial thoughts were single family homes, but I am realizing there may be better ways to scale and reach my goals. What strategy would you implement if you were in my situation? Thank you all for the help! This community has been so helpful.

There is no "generic best strategy". The strategy you choose is based on the market you are investing in, the potential cash flow and/or profit that can be made in the market matched up with the strategy that delivers the deal best. You can't (shouldn't...ever) go in with the idea you have a strategy you like, and try to apply it to every property. You will make money on some, but you can lose money just as easily if you should have used a different strategy. Bottom line is this. You need to learn as many strategies as you possibly can...which should be a never ending/limitless number, and apply these strategies to every property you are analyzing. Then, choose the best one that works at that time.

@Faraz K. wow, people are overcomplicating this. house hack. no need to partner at this point.

There was a podcast recently about lending money, which is very passive. I can’t find the link right now but I think if you search flynn family lending you can look into it more

@Faraz K. Welcome to the adventure! Both high ROI & monthly passive income will be hard to find. Typically you will have one or the other. San Diego is a high appreciation market that is very hard to cash-flow. Of course the more you put down the lower your payment, the higher your cash flows. But that will hurt your Cash on Cash return. My advice is as follows: 1. Start running numbers on as many deals as possible when you have time. Start to see what areas and what types of properties are going to get you closer your goals. Here in San Diego go East. El Cajon, Lakeside, Jamul, Rancho San Diego, Etc. The farther away from the coast the more the price goes down. However if it is still in San Diego county you should see high occupancy rates. 2. Look at other areas you know well and run the numbers. Find an investor friendly agent (not a bunch, agents like loyalty and will work harder for you if they know they have a better shot of getting your business.) 3. Stop thinking and start doing. Buy something. ASAP. Pick a direction and go full steam ahead. If you listen to the podcasts, all the big guys say the same thing. Beware of opportunity cost. Learn as you go. Doing your research is good, but Analysis Paralysis is not going to help. It took me about a year from when I first got bit by the real estate bug to when I purchased my first property. And I was active duty Navy at the time on deployment with almost zero downtown. Sneaking forum sessions and podcasts in while i was working. Hope this helps!

Hey James - wow, this is great advice, thank you! At this point in my life I don't want roommates, so options 2 and 3 are paths I am strongly considering. My buddy bought a house and built an ADU and just rents that out, and it offsets part his mortgage. Although this is not cash-flowing, you are obviously still building equity. SO maybe my approach is two-pronged: I can do a house hack, and then passively invest in syndications...

2. A duplex. If you've bought in one of the Denver-area cities that allow non-owner occupied STRs, then you can short-term rent the other side to maximize your revenue. Or hey, you can also just rent out the other side long-term. (If you have more than one bedroom on your side, you could also rent out the second bedroom.) Then when you move out, you can rent both sides, or short-term rent one and long-term rent the other, etc. 3. A SFH with a separate basement entrance. We find these all the time for our Denver and Colorado Springs house-hacking clients. You live up top, and rent the basement -- either as a LTR or as an Airbnb. (You can really only LTR it if you have a kitchen down there, so you need to know your zoning and whether that's allowed.) I'm thinking about both -- A) how do you maximize your revenues while you live there and B) how do you maximize your revenues if/when you move out. (Also, side not to all of this -- consider as an alternative to the above rental models a medium-term rental for traveling nurses or remote workers. It's a kind of in-between the STR and LTR. More money than LTR, less work than an STR.) Whatever you decide, I wish you the best!

Sent you a PM. Lets connect this week. Just attended the RAL conf in PHX and got a ton of contacts and insight for a future purchase.

Here's my situation, what would you do?

Cody L.

Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes

3y

Quote from @Faraz K.:

Hello Bigger Pockets Community!

I’m new here and new to Real Estate in general, however I am very enthusiastic and determined to learn and invest wisely. Here’s a bit about myself and my goals:

Me:

- Early 30’s, single, no kids
- Compensation = ~$200k/yr (most of this is still W2)
- I’ve set aside between $75 - $100k in cash to invest in RE
- Current rent = $2100/mo.
- Credit score is high 700’s
- I do not own any property
- Split time between Phoenix, San Diego, and Denver

Goals:

- I’m a business owner, and still have a full-time job for a bit longer, so those will take my time priority for the foreseeable future
- My time is critical to my business, so I’m hoping to avoid the more time-consuming options
- I'm looking for the best way to achieve high ROI and monthly passive income
- I have friends who are more versed in RE than I am, who I can partner with if needed

I am still in the education phase; however, I am trying to decide what’s the best strategy for me. I am not afraid of putting in the work, but my business will take priority for now. My initial thoughts were single family homes, but I am realizing there may be better ways to scale and reach my goals.

What strategy would you implement if you were in my situation?

Thank you all for the help! This community has been so helpful.

Partner with @Kevin Wood

0 Reply

Fernando E.

Rental Property Investor · SF Bay Area · Member since 2016 · 234 posts · 103 votes

3y

Quote from @Faraz K.:

Hello Bigger Pockets Community!

I’m new here and new to Real Estate in general, however I am very enthusiastic and determined to learn and invest wisely. Here’s a bit about myself and my goals:

Me:

- Early 30’s, single, no kids
- Compensation = ~$200k/yr (most of this is still W2)
- I’ve set aside between $75 - $100k in cash to invest in RE
- Current rent = $2100/mo.
- Credit score is high 700’s
- I do not own any property
- Split time between Phoenix, San Diego, and Denver

Goals:

- I’m a business owner, and still have a full-time job for a bit longer, so those will take my time priority for the foreseeable future
- My time is critical to my business, so I’m hoping to avoid the more time-consuming options
- I'm looking for the best way to achieve high ROI and monthly passive income
- I have friends who are more versed in RE than I am, who I can partner with if needed

I am still in the education phase; however, I am trying to decide what’s the best strategy for me. I am not afraid of putting in the work, but my business will take priority for now. My initial thoughts were single family homes, but I am realizing there may be better ways to scale and reach my goals.

What strategy would you implement if you were in my situation?

Thank you all for the help! This community has been so helpful.

@Faraz K. first, a congrats is in order. Early 30s with a healthy compensation, with great credit score and savings, well done. Lots of smart people here in BP, very much experienced in REI so you will find some good opinions. Here's mine, IF I was in your position, I will find a great location and neighborhood and buy a house (SFR or MFR) that needs some repairs, I will put in 3.5% FHA, have this repaired and house-hack it. This may look like its a slow process, but from my perspective, this is boht an offensive and defensive move. Offensive since you are buying a hard asset that is undervalued, you're taking control of a hard asset with minimal cash, with the opportunity to increasing its value. Defensive, since it may reduce your rent expense, and you get the benefits of interest tax write off, and your renters helping pay off the mortgage. With a minimal expense and a high income, you can continue studying real estate and focusing on growing your business. I think this is a good start in real estate, you will have some land lording skills that will serve you well as you grow your portfolio. Just my opinion, NFA, DYOR of course, I'm sure you will figure it out. Good luck.

0 Reply

Kevin Wood

Investor · Houston, TX · Member since 2013 · 471 posts · 267 votes

3y

Thanks for the mention @Cody L. In truth the answer is that your best returns are going to be as an LP working with a syndicator. You need to focus on your highest ROI activity. Research a few syndicators who's model you like in a market you like. I do Houston only because I grew up here and I like the economics of the market. Some tips to get you started:

- What markets and asset types does the syndicator purchase?
- How do they structure their LP deals?
- What is their investment philosophy?

For individual deals:

- What growth rate are they using? Is this consistent with their market?

- Do their rent comps make sense (quick web search)?

- How experienced are they with that particular type of asset?

- What is the internal rate of return and how is it paid (from cash flow?, from a sale?)

- What is the exit cap rate they are predicting? Does the syndicator need to sell to get your money back?

There are some good books on how to review deals as well if you do an amazon search. I haven't read any, as I syndicate myself, so you'll need to get some book recs from others.

2 Reply

Mark Frattini

Real Estate Agent · San Diego, CA · Member since 2014 · 338 posts · 176 votes

3y

@Faraz K.

Learn how to take advantage of the current market conditions. A lot of buyers are sitting on the sidelines because of the fear and uncertainty in the marketplace. Right now there is a lot of focusing on the negative and watching what other people are doing. The majority want to buy when the sentiment and price are at their peak.

Be greedy when others are fearful and fearful when others are greedy.

0 Reply

Ruchit Patel

Bay area, CA · Member since 2021 · 383 posts · 306 votes

3y

Young, good salary, and no-time: turnkey properties out of state would be best!!

0 Reply

Scott Sklare

Real Estate Broker · Beloit, WI · Member since 2015 · 232 posts · 60 votes

3y

Quote from @Faraz K.:

Hello Bigger Pockets Community!

I’m new here and new to Real Estate in general, however I am very enthusiastic and determined to learn and invest wisely. Here’s a bit about myself and my goals:

Me:

- Early 30’s, single, no kids
- Compensation = ~$200k/yr (most of this is still W2)
- I’ve set aside between $75 - $100k in cash to invest in RE
- Current rent = $2100/mo.
- Credit score is high 700’s
- I do not own any property
- Split time between Phoenix, San Diego, and Denver

Goals:

- I’m a business owner, and still have a full-time job for a bit longer, so those will take my time priority for the foreseeable future
- My time is critical to my business, so I’m hoping to avoid the more time-consuming options
- I'm looking for the best way to achieve high ROI and monthly passive income
- I have friends who are more versed in RE than I am, who I can partner with if needed

I am still in the education phase; however, I am trying to decide what’s the best strategy for me. I am not afraid of putting in the work, but my business will take priority for now. My initial thoughts were single family homes, but I am realizing there may be better ways to scale and reach my goals.

What strategy would you implement if you were in my situation?

Thank you all for the help! This community has been so helpful.

Hello and congrats getting started investing in real estate.

I would be happy to visit with you on the phone with specific ideas. Check your BP inbox.

0 Reply

Lisa Wright

Real Estate Agent · Metro Detroit · Member since 2022 · 66 posts · 28 votes

3y

Will you continue splitting time between the three locations? If so maybe a property in each that you air b&b so you have a home base when you are there. Hire management to clean and do maintenance.

Otherwise a duplex is nice so the tenant is paying your mortgage off.

Good luck!

0 Reply

Aj Parikh

Rental Property Investor · Centreville, VA · Member since 2019 · 1k+ posts · 799 votes

3y

Hi Faraz! Welcome to Bigger Pockets!!! The best way to be passive in your real estate is buying turnkey properties. They have properties in Class A or B neighborhood and have a team put together so you just have to come up with the downpayment. I have personally used that strategy and definitely recommend to investors who don't have a lot of time and want to park their money somewhere. Feel free to reach out if you want to discuss

0 Reply

Ruchit Patel

Bay area, CA · Member since 2021 · 383 posts · 306 votes

3y

For people making good money but busy, turnkey providers exist. With good company, you can get good returns completely passively. I think you should do that. Passive investments.

I am from California and I have been doing that for 18 months now.

0 Reply

Nicolas Trejo

Real Estate Agent · San Diego · Member since 2022 · 33 posts · 17 votes

3y

Partners are good if you trust them. Pool your capital together and go buy more units!

0 Reply

Nate Sanow

Investor & Agent · Tulsa, OK · Member since 2016 · 1k+ posts · 1k+ votes

3y

I’d go slow on partnering with those friends if just starting out, especially if it was their idea and they know about your higher wages… and I would personally just try to get the first deal, and I’d make sure that first deal is set up to scale. My first vote is brrr, 2nd is flip. If you go the pay retail route with 20% down you might save some stress but likely won’t scale for awhile.

0 Reply

Eliott Elias

Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes

3y

I would save as much money as possible and be super aggressive in the market. Buy as many deals as you can, stop putting money in a retirement account, let your real estate be your retirement and pay you dividends with cash flow.

0 Reply

Ryan Tubman

Member since 2021 · 2 posts · 0 votes

3y

Hey Faraz, just reading through your post and the comments. Lots of good information here and I agree with most of it. Not sure where you've landed in developing your strategy, but wanted to let you know I'm going to be listing an SFR with an ADU in Arvada in the coming weeks. It's a flip and I've gone back-and-forth on whether to convert to an STR/LTR or sell. I have too many other irons in the fire right now so looking to put it on market. Could be a great option for you to house hack with additional income off the ADU. As others have mentioned, Arvada offers great flexibility with regard to STRs. PM me if you are interested and I'll let you know when we are ready to list. Thanks and good luck!

0 Reply

Here's my situation, what would you do?

Here's my situation, what would you do?

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